China's health reform cuts drug prices, but still fights pain

Photo taken on March 28, 2011 shows several repriced medicines at a pharmacy in Shenyang, capital of northeast China's Liaoning Province, March 28, 2011. (1.5 billion U.S. dollars) a year. (Xinhua/Zhao Jingwei)

LESS EXPENSIVE, BUT HARDER TO FIND

While some patients benefit from the less expensive drugs, others find that some drugs have disappeared from the shelves of neighborhood clinics. To get medicines they need, sometimes they have to go to higher-level hospitals.

Li Jian, a retiree from the coastal port city of Tianjin, suffers from asthma. Li uses an anti-inflammatory inhaler that costs about 300 yuan. Since the essential medicine list came into effect, his local clinic has stopped carrying his prescription inhaler.

"Doctors in the community clinic are reluctant to prescribe drugs that sell for over 100 yuan for fear of being accused of aggressive prescribing, so I have to travel farther to a larger hospital to buy the spray," said Li.

BIDDING PROCESS RAISES QUALITY CONCERNS

Pharmaceutical companies are not happy, either. Some argue that the essential medicine procurement system distorts market competition.

Across China, essential medicines are procured by provincial governments through bidding, and distributed to hospitals at all levels.

Some drug producers complain that only companies offering the lowest prices can win bids, thus driving producers of quality drugs out of market.

Liu Gexin, CEO of Sichuan Kelun Industry Group, a pharmaceutical company, submitted a proposal to adjust the current procurement system of essential medicines during the annual legislative session this year.

Liu said some companies might compromise drug quality to lower production costs. For example, Liu said, Fufangdanshen, a traditional Chinese medicine tablet, has a market price of 5.6 yuan, but the government procurement of Anhui Province prices it at 0.95 yuan.

"The bidding price is significantly lower than the cost of raw materials, supplements and packaging," said Liu, calling for changes in the current tender system that only favors low prices.

Song Wenzhi said that, in a country with 1.3 billion people, a quickly aging population and a grave shortage of healthcare resources, it's natural for problems to surface as health reforms sail into uncharted waters.